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Identity Theft is at a Record High: What This Means in the World of Online Commerce

According to the Government Accountability Office, taxpayer identity theft has increased fivefold since 2008. This has become an absolute nightmare for the IRS, especially its criminal investigations division, the division responsible for investigations of of identity theft. However, even the IRS admits that they “pursue criminal investigations of suspected identity thieves in only a small number of cases.” In other words, the majority of identity thieves are not prosecuted. Identity thieves are faced with far too few obstacles and therefore, their crime rates will continue to rise. And indeed they have risen: there were 248,357 incidents in the 2010 fiscal year, in comparison to the 51,702 in 2008.

The Implications:

The identity theft counts are more than just a mere statistic: these numbers make up a trend that affects more than tax returns. The rise in identity theft rates mirrors that of other cybercrimes. Online trust concerns are a direct result of the inability of security solutions in keeping up with rapidly developing technology. The changing face of technology and cyber commerce make security much more complicated than the situation shown in the comic above.

Giving away any information at all online can pose a risk. The recent Sony Network breach is proof that even larger, established companies can’t always protect customers’ information. Personal information obtained from Sony included the names, addresses, email addresses, birthdays, PlayStation Network and Qriocity passwords and user names, and online user handles, of over 70 million customers.

Naturally, people have become more protective of their financial and personal information. This poses unfortunate challenges for small businesses who are trying to make their mark in the seemingly endless web of the internet. Customers are extremely reluctant to give away their personal information to lesser-known companies, and therefore, online businesses suffer. In fact, more than 63 percent of shoppers leave transactions uncompleted because they are concerned about online security. At an average of $109 in abandoned goods per transaction, online businesses lost $21 billion in the year 2008 alone.

Recent events make it even more imperative that small businesses, consumers, and the government all work together to create a safer shopping environment. The practice of online commerce is here to stay, so we must all take steps to protect our own information and the information of our customers. What are you doing to improve online trust concerns?